Do not ask only, “Which number is lowest?”

Ask whether each contractor priced the same result, included the same responsibilities, and clearly explained what could change the final cost.

First, make the estimates comparable

Give each contractor the same project description, known conditions, desired outcome, and important constraints. When possible, ask for the estimate in writing and request clarification in writing.

The Federal Trade Commission recommends getting multiple estimates and says a written estimate should include a description of the work, materials, completion date, and price. It also warns against automatically selecting the lowest bidder when prices differ significantly.

Compare the written scope line by line

Look for the work that is explicitly included:

  • Preparation, protection, demolition, removal, and disposal
  • Repair, installation, testing, startup, and final adjustment
  • Access, excavation, patching, painting, finish work, and restoration
  • Cleanup, hauling, and final walkthrough
  • Documentation, manuals, permits, inspection, and closeout

Then identify exclusions. A low estimate may leave major work to the homeowner or to another contractor.

Review materials and equipment

  • Manufacturer and model where known
  • Size, capacity, grade, finish, efficiency, or performance requirements
  • Who selects and purchases each item
  • Allowances and what happens if actual selections cost more
  • Whether substitutions require written approval

“Standard materials” is difficult to compare. Ask for enough detail to understand the price and future maintenance or warranty implications.

Confirm permits, licensing, and insurance

Requirements vary by jurisdiction and trade. Confirm which party is responsible for permits, inspections, utility coordination, and code-required corrections. Check licenses or registrations with the appropriate state or local authority rather than relying only on a number printed on an estimate.

Ask for current proof of insurance appropriate to the work and confirm it independently when the project risk justifies doing so. Do not assume a business license is the same as trade licensing, insurance, bonding, or workers’ compensation coverage.

Compare schedule and access assumptions

  • Estimated start date and duration
  • Work hours and access requirements
  • Weather, material, inspection, or utility dependencies
  • Who protects the home and belongings
  • How delays will be communicated

Review deposits and payment terms

Compare the deposit, milestone payments, final payment, accepted payment methods, financing, and conditions for releasing payment. Avoid paying the entire project in advance. State and local rules may limit deposits or require specific contract language.

Payments should generally correspond to clearly defined progress or delivered materials. Do not sign blank documents, transfer a deed, or accept contractor-arranged financing without independently understanding the terms.

Understand change orders and unknown conditions

The estimate should explain how changes are authorized and priced. Ask:

  • What conditions could trigger additional work?
  • Who can approve a change?
  • Must approval be written before work proceeds?
  • Are overhead, markup, trip, disposal, or administrative charges added?
  • How are credits handled when work is removed?

Compare warranty and closeout

Separate manufacturer coverage from the contractor’s workmanship warranty. Record the duration, exclusions, claim process, required maintenance, transferability, and who pays for labor, access, shipping, or diagnosis.

Confirm what you receive at completion: paid invoice, permit closeout, inspection approval, warranty documents, manuals, model information, maintenance instructions, and final photos.

Check the contractor, not only the paper

  • Verify business identity, contact information, and required credentials
  • Ask for recent references relevant to similar work
  • Review complaint information and online patterns critically
  • Notice whether questions are answered clearly and without pressure
  • Keep copies of estimates, messages, contracts, and changes

Use a documented decision

Write down the reason for your choice. Consider scope completeness, confidence in the plan, qualifications, communication, schedule, warranty, and total price. A clear decision note is useful if the project changes later.

Open the free Contractor Quote Comparison Tool to organize three bids without an automatic “winner.”

Pause when pressure replaces clarity.

Door-to-door urgency, demands for full payment, cash-only requests, blank contracts, and pressure to use a particular lender are warning signs identified in FTC consumer guidance.

Primary sources

Editorial note: Contract, licensing, permit, cancellation, payment, and lien rules vary. Obtain local legal or professional advice when appropriate.